HONG KONG. The Chinese company Kaisa Group Holdings Ltd. said Thursday it wants to extend the maturity of Hong Kong dollars.3.118 billion ($ 400 million) for a year and a half is part of the developer’s efforts to avoid an unpleasant default and resolve the liquidity crisis.
In the application, Kaisa said she would swap her 6.5% offshore bonds maturing on December 7 for new bonds maturing on June 6, 2023 at the same interest rate if at least 95% of the holders agree.
Qaisa, who has the most offshore debt among Chinese developers after China Evergrande Group, skipped coupon payments totaling Hong Kong dollars.689.3 million ($ 88.4 million) maturing on November 11 and 12. Payments have a 30-day grace period.
Kaisa, which resumed trading after a November 5 suspension, rose 18% in the afternoon. Investors were delighted with the company’s attempt to solve payment problems.
Kaisa said the sharp downturn in the financial environment limited funding sources to maturity.
“If the exchange offer and request for consent are not successfully completed, we will not be able to redeem the existing bonds after their maturity date on December 7, and we may consider an alternative debt restructuring,” the statement said.
Chinese developers have faced an unprecedented liquidity shortage due to regulatory restrictions on borrowing, which has led to a string of defaults on offshore debt, downgrades in credit ratings and sell-off of developer stocks and bonds.
Kaisa is struggling to raise capital through the sale of assets, including the Hong Kong-based property management unit Kaisa Prosperity Holdings Ltd.
Reuters recently reported that it recently sold a land plot in Hong Kong to a local investor for HK $ 3.78 billion ($ 484.82 million), returning about HK $ 1.3 billion ($ 166.7 million) in cash after repaying the loans. taken by the ground. Kaisa is also selling another land plot in the city.
“Providing solutions and increasing market clarity is positive; In the end, Kaisa has good fundamentals and if it manages to strike a deal with creditors, it can gradually repay to get out of the crisis, ”said Kington Lean, managing director of asset management at Canfield Securities Limited.
The developer, in a separate filing late Wednesday, said it is seeking to accelerate the implementation of real estate projects and other high-quality assets to boost liquidity.
Having skipped payments for onshore wealth management products totaling RMB 1.5 billion ($ 234.80 million) due in October and November, Kaisa said it had implemented measures to pay RMB 1.1 billion ($ 217.98 million). dollars) and negotiates with investors on the remainder.
The developer also stated that “some members of the group” have not met their repayment obligations under financial agreements involving bank loans and other borrowings, and that it is formulating an overall repayment plan.
Other developers in need of cash, including Evergrande, the world’s most heavily indebted developer that has stumbled from a deadline to a deadline in recent weeks struggling to cope with more than $ 300 billion in liabilities, are also in talks with their creditors and all forces are trying to raise funds.
“Companies want to buy time, and creditors want their money back. Agreeing to an extension is better than calling companies bankrupt and getting nothing, ”Lin said.
Local media reported on Thursday that the ground division of electric vehicle subsidiary Evergrande increased its registered capital by 39 percent to $ 3.5 billion. Evergrande New Energy Vehicle, a Hong Kong-registered company, said last week that it plans to raise about $ 347 million through a share offering.
Smaller competitor Fantasia Holdings said Wednesday that it had reached an agreement with holders of onshore bonds worth 1.5 billion yuan ($ 234.87 million) due in 2023 to pay a 20 percent coupon due Thursday, with the remainder a year off. later.
But the media reported that the decision to renew another 2.5 billion yuan ($ 391.46 million) onshore bond maturing in 2023 was not made on Wednesday.
Fantasia failed to pay off $ 205.7 million of offshore bonds that were due to be redeemed on October 4.
In addition, ratings agency Fitch on Wednesday downgraded China Aoyuan’s credit rating to ‘CCC-‘ from ‘B-‘, reflecting a diminished chance of the company being able to refinance its USD 688 million offshore bonds maturing in January 2022 of the year.
On Monday, Aoyuan said it had extended the date for the 816 million yuan ($ 127.77 million) buyback of onshore-backed securities and brought in Admiralty Harbor Capital Limited and Linklaters as consultants to assess the company’s capital structure and negotiate with creditors.
Fantasia shares were unchanged, while Aoyuan and Evergrande gained 2.3% and 0.7%, respectively. The Hang Seng Index has not changed.
Claire Jim and Samir Manekar